Thursday, September 14, 2006
In what I call a structural reform prosecution, prosecutors secure the cooperation of an organization in adopting sweeping internal reforms rather than seek its conviction for criminal acts of its agents. Dozens of leading corporations in the past few years entered into demanding settlements with federal prosecutors, including AIG, American Online, Bristol-Myers Squibb Co., Computer Associates, HealthSouth, KPMG, MCI, Merrill Lynch & Co, Monsanto, and Time Warner.
Nevertheless, no scholars have considered the problem of prosecutors seeking structural reform remedies. I conducted the first empirical study of the terms in the agreements the DOJ has negotiated to date, which reveals that federal prosecutors consistently imposed deep governance reforms, but also unrelated terms indicating potential abuses of their power. Unlike in civil rights cases that long accomplished court-supervised institutional reform, prosecutors designed settlements to avoid judicial review of their terms or implementation. We should carefully examine this bold new prosecutorial mission because it fundamentally transforms federal criminal law, affects entire industries, and yet appears to lack any due process safeguards.
I frame and evaluate five models that prosecutors can adopt to pursue structural reforms. Prosecutors have chosen the model that departs most radically from prior federal organizational criminal law. I conclude that in time, however, judicial limits will constrain prosecutorial discretion and result in a more effective regime for deterring organizational crime. [Mark Godsey]